Albemarle selling out of Liontown

US company Albemarle Corporation has appointed brokers to sell its stake in Liontown Resources, three months after Hancock Prospecting effectively blocked its $6.6 billion takeover bid.

JP Morgan was looking to sell Albemarle’s four per cent stake after the market closed today, at prices ranging from $1.26 per share to $1.32 per share.

With Albemarle holding 96 million Liontown shares, the deal will be worth about $125 million.

The planned sale will be at a loss for Albemarle, which was understood to have acquired its stake at an average entry price of $2.35 per share.

Albemarle attempted four times to acquire Liontown, which is developing the Kathleen Valley lithium mine in the Goldfields.

The mine would have provided a new supply for Albemarle’s downstream processing operations, including its lithium refinery at Kemerton in the South West.

It lodged indicative proposals at $2.20 per share in October 2022, $2.35 in March 2023 and $2.50 later that month.

It appeared to have succeeded in September when the Liontown board backed its fourth proposal - a takeover bid priced at $3 per share.

However Australia’s richest person, Gina Rinehart, ended the party after her private company Hancock Prospecting acquired a 19.9 per cent blocking stake.

Albemarle scrapped its takeover bid in mid-October, triggering a collapse in Liontown’s share price and forcing the company to complete an equity and debt raising to ensure it could complete construction at Kathleen Valley.

Hancock has retained its 19.9 per cent stake but has been silent on its intentions.